Tuesday, November 27, 2012

Nonprofit Fraud: Is the Salvation Army Worthy of Our Contributions?

by Gary Snyder

The former executive director of a
Salvation Army facility has been recently charged in a massive theft of
thousands of toys and donations from the charity's Toronto warehouse. The Salvation Army announced the theft just weeks ago,
saying up to 100,000 items worth about $2 million were allegedly stolen from
the facility. The executive had been fired. In January 2005, an employee
of the Toronto Salvation Army was charged with stealing in excess of $1
million.

This is on the heels
of a tidal wave of similar frauds, over the years, at the Salvation Army:

·The Salvation Army embezzlement at the New Philadelphia
citadel ended in a no contest plea thus admitting that the facts in the charges
are true. She was a Salvation Army captain. She had a previous conviction for
altering a prescription for pain medication. She was placed on probation. The Dover/New Philadelphia Corps Officers have replaced staff and restructuring at the Dover facility in under way.

·In Tulsa, A former finance
director at the Salvation Army took $205,468 in an embezzlement
case. It took over three years to catch her.

·In Atlanta, a Salvation Army
employee was indicted on charges she stole $200,000 in financial aid funds. The
alleged crimes occurred from 2004 to 2007.

·The financial manager of the
Salvation Army's Newark in New Jersey pleaded guilty to tax evasion and
conspiring to embezzle. He admitted to cutting 585 checks worth approximately
$385,000, which were supposed to be used for charity purposes. It took seven
years to catch him.

·A human resources director and an
office manager for the Salvation Army, in Montgomery, Al was arrested and
charged for embezzlement.

·A prison escapee
landed a position as planned giving director at
Salvation Army Hawaii. He had deposited at least $150,000 in Salvation Army checks to an account he controlled and received deeds to properties valued at over $200,000.

·An
accountant had been indicted on charges of stealing $166,914 from the New York
Division of The Salvation Army. His principal responsibility was keeping
the financial and administrative records of two Salvation Army programs. The money he stole from the Salvation Army homeless shelters
went to pay restitution on an earlier fraud committed against another Manhattan
non-profit organization, the Jewish Telegraphic Agency, a news service for the
Jewish community. For about three years, Keaton worked for JTS organization as an accountant and stole over $24,000.

·The pastor of a trucking ministry in Oklahoma was charged with
taking money from a Salvation Army thrift store while employed as its manager.
The investigation led to his 1981 sentence for a felony theft conviction in
Maryland. He was extradited to Maryland on a governor's arrest warrant
issued in 1984 for violating his probation.

·Ottawa’s
Salvation Army has fired its executive director following an internal audit.
Toronto-based Major John Murray of the organization’s public relations and
development division, said $240,000 has gone missing from the George St. Booth
Centre

·The operations
manager of the Redding Salvation Army thrift was charged with embezzling $98,000
over a period of eight years.

In the late 1990s, the American
Institute of Philanthropy communicated its concern that The Salvation Army’s
governing body is rather insular for such a large charity, Lieutenant Colonel
Tom Jones, Community Relations and Development Secretary of The Salvation Army
said that to get to the position that The Salvation Army is
in they must have the absolute integrity and that considerable checks and
balances have been put in place over 30 years. Ouch.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

About Me

Gary Snyder is the author, most recently, of the groundbreaking expose on the charitable sector, Silence: The Impending Threat to the Charitable Sector as well as the often-cited guide on best practices and key concepts, Nonprofits: On
the Brink.

He is the publisher of a
twice-monthly newsletter, Nonprofit Imperative that gives an update on the current status of the
charitable sector.

Snyder is often quoted and frequent contributor to the blog of the National
Committee for Responsive Philanthropy. Snyder twiceauthored the Governance Chapter of the Michigan
Nonprofit Management Manual (4th and 5th editions).

He is a speaker on ethics,
financial and governance matters of the sector. For almost a decade, Snyder is frequently
consulted by Congress and has been quoted in print, broadcast and online media
outlets.